Wood prices continue to escalate
Purchasing Staff -- Purchasing, 9/13/2004 12:56:00 PM
Lumber prices have jumped recently, with availability a problem for buyers at the moment. Western SPF prices tracked by economists at BMO Nesbitt Burns have been selling at a record $467 per thousand board feet (mbf). That’s an increase from $422/mbf earlier this summer and $144/mbf in September 2003. Random Lengths’ newsletter framing lumber composite price in September was averaging $463 versus $386 a year ago. Panel prices have rebounded, also: OSB (oriented strand board) panel prices are averaging $405 after falling below $300 earlier in the summer.
Lumber from Northern tree species are stronger and less likely to warp than Southern pine because of a slower growth cycle. That’s why grades of Northern lumber (from Canada, Maine and the Pacific Northwest) are important to the marketplace.
In the past six years, more than 5.5 million acres of Maine forestland have changed hands, resulting in new investment patterns that have led to new harvesting practices. There also have been changes in logging laws. Historically, Quebec loggers would harvest wood in Maine in summer months. The U.S. banned the practice this year, presumably to protect jobs for U.S. citizens. The result has been a shortage of logs in Maine and a subsequent rise in Northern hardwood and softwood prices.
Meanwhile, for the third time, a North American Free Trade Agreement panel has ruled that the U.S. failed to prove its lumber industry is harmed by Canadian imports. Softwood lumber from pine, spruce and fir trees is used to build homes. In 2002, the U.S. imported about a third of its supply--nearly $6 billion--from Canada. That year, the Bush administration slapped stiff duties on softwood imports from four Canadian provinces. The Commerce Department in June proposed cutting the duties, which include antidumping and punitive tariffs, to 13.2%. The issue is of interest in the Northeast because a lively lumber trade has existed between Maine and border provinces for more than a century, with logs, chips and lumber routinely flowing back and forth across the border.
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